Ingenix’s MM APS-DRGs solution enables hospitals to prepare
for CMS’ implementation of severity-adjusted reimbursement
EDEN PRAIRIE , Minn. , February 22, 2007 — Ingenix, a leading health information company, today announced that it is offering a free evaluation license for its MM APS-DRGs ™ (Medicare Modified All-Payer Severity-Adjusted Diagnosis Related Groups) severity-adjusted reimbursement solution to hospitals, managed-care plans and hospital associations. Ingenix is offering the free evaluation license to help the health care industry gain an advanced understanding of using severity-adjusted reimbursement, and to allow organizations to study one of the methodologies that CMS is considering for implementation on October 2007 prior to the public comment period, which is expected to begin in May when the Notice of Proposed Rule Making is published.
“It’s essential for the industry to provide feedback to CMS on proposed changes to health care reimbursement. By providing MM APS-DRGs prior to implementation, interested parties can take the time to analyze the details of the methodology, assess financial and operational issues and provide quantitative input to CMS,” said David Ostler, executive vice president of the business solutions group at Ingenix. “In addition, the MM APS-DRGs methodology is an ideal learning tool for hospitals. It is a fully transparent methodology that builds on the current DRG system and will allow hospitals and the public to easily make the transition from the current DRG system to a severity-adjusted system.”
A key issue with any severity system is how the presence of specific secondary conditions, as well as combinations of conditions, impacts reimbursement. No matter what severity system CMS adopts, hospitals that are able to code completely and accurately, capturing all secondary and relevant conditions, will win. Hospitals can use MM APS-DRGs to do an initial evaluation of how well they are doing today, and get ahead of the learning curve.
CMS is expected to begin its phase-in of severity-adjusted reimbursement in October, which means that coders will need to quickly learn the nuances of the new reimbursement model preventing productivity losses that can impact hospital cash flow. Under the proposed severity-adjusted reimbursement model, payments to hospitals are based on hospital costs and the severity of the patient’s condition. Severity is represented by the presence of additional specific conditions, beyond those that primarily brought the patient to the hospital for treatment.
The Ingenix MM APS-DRGs solution enables hospitals to predict care delivery costs based on how sick the patient is and provides the foundation for payers and providers to implement severity-adjusted reimbursement. MM APS-DRGs analyze clinical data to classify patients into meaningful patient clusters based upon the diagnosis and condition of the patient. This system includes a unique case-specific relative weight methodology that uses coexisting clinical conditions to discriminate among sicker patients based upon additional complications or comorbidities. Higher weights are assigned to more serious conditions and earn higher reimbursement, while lower weights are assigned to patients with a lower level of severity and earn a lower level of reimbursement.
Although CMS has announced the timetable for the phase-in of severity-adjusted reimbursement, the agency has yet to decide on the software solution it will use to drive the new reimbursement method. CMS plans to announce its decision in May.
“We are pleased that CMS is considering the use of MM APS-DRGs, and we are confident in the performance of our solution,” Ostler said. “An independent evaluation by The Lewin Group reported that MM APS-DRGs explain at least as much variance in patient case costs as the CSA-DRGs (Consolidated Severity-Adjusted DRGs) that CMS originally proposed to use. In addition, The Lewin Group noted that use of MM APS-DRGs is less likely to result in underpayment to high-casemix hospitals than CSA-DRGs.”
Hospitals, managed-care plans and hospital associations that would like a free MM APS-DRGs evaluation license can call 1-800-765-6613 or send an e-mail to innovate@ingenix.com for details. Additionally, organizations can visit “The Leary Report on PPS” blog at www.ingenix.com/learyreport to find additional details about severity-adjusted reimbursement and the status of CMS’ technology selection process.
About Ingenix
Ingenix, a wholly-owned subsidiary of UnitedHealth Group (NYSE: UNH), provides products and services to a diverse customer base within the health care community. Organizations rely on its innovative technology to improve the delivery and operations of their business. More information about Ingenix and its products and services can be obtained at http://www.ingenix.com.
APS-DRGs is a trademark of Ingenix. | 
